Culp net sales down; ticking profitable

Textile supplier Culp Inc., which has headquarters in High Point, N.C., had net sales of $45.5 million for the first quarter of fiscal 2010, a decrease of 23% over the same quarter a year ago. Its mattress fabric segment was down 26% and upholstery fabric sales were down 19%.

Pretax income was $2 million, or 4.4% of sales, compared with $1.2 million, or 2% of sales over the previous year.

“In spite of the sales decline, we are very pleased with the strong turnaround in profitability for our upholstery fabrics business and continued solid profitability in our mattress fabrics segment,” said Frank Saxon, Culp president and chief executive officer.

“We began fiscal 2010 with a much leaner operating platform than we had a year ago and we are realizing the benefits of our strategic actions, especially during the economic downturn. Today, Culp has a strong competitive position in both businesses and, as always, our primary focus is on execution for our customers.”

Mattress fabrics achieved solid profitability in spite of unprecedented weak consumer demand in the bedding industry, the company said. Operating income for this segment was $3 million with operating margins of 11.2% of sales, down from $4.2 million and 11.9% of sales for the same quarter the previous year.

The company’s total cash flow from operations was $4.6 million for the quarter.

Culp said it is close to a positive net debt position for the first time in more than 30 years. Its balance sheet reflected $15.5 million in cash as of Aug. 2, compared with $11.8 million at the end of fiscal 2009.

Culp’s financial position continued to strengthen significantly during the first quarter, the company said, with an ending cash balance of $15.5 million and total debt of $16.4 million. Total debt, which includes current maturities of long–term debt and long–term debt, less cash (net debt) was $0.9 million, compared with $4.6 million at the end of fiscal 2009.

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